Thordur Óskarsson, who is scheduled to address the issue on Wednesday during an Ottawa speech hosted by the Canadian Nordic Society, said in an interview that he intends to “set the record straight vis-à-vis the official position in Iceland” on the matter: “The Canadian dollar is not on the table.”

The dismissal of the idea follows the release of a major economic study last month by Iceland’s central bank, which concluded that the island nation of 320,000 people should continue with its own deeply devalued currency — the Icelandic króna — for the immediate future, but that its best, long-term prospects for prosperity would flow from a successful bid to join the European Union and the adoption of its currency, the euro.

Iceland is currently negotiating entry into the EU.

“Basically this report concludes that the Canadian dollar is not the first, second, third or fourth option, even,” said Óskarsson.

“Traditionally, our main export markets are in Europe – the European Union. All the economic aspects really point in that direction.”

Earlier this year, there was mounting speculation that Iceland was giving serious consideration to adopting Canada’s currency because of this country’s relatively impressive economic performance in recent years, its widely admired banking system — which emerged unscathed from the 2008 global financial crisis — and its strong dollar. (One loonie would currently trade for about 125 króna.) Even the deep historical bond between the two countries — including the fact that the first European to set foot in the future Canada, 10th-century Norse explorer Leif Ericson, was born in Iceland, and the fact that Canada has more citizens of Icelandic heritage than any nation apart from Iceland — was invoked to promote the idea.

Prominent Icelandic economist Heidar Gudjonsson, chairman of the Reykjavik-based Centre for Social and Economic Research, has led the push to have Iceland adopt the loonie, arguing the case in a widely discussed Fraser Institute speech in May and a related article published by the Financial Post.

“Icelanders were hard-hit by the collapse of the króna, and not for the first time, as the sad history of the currency shows,” Gudjonsson stated at the time. “The way to future prosperity is to have access to international markets with an international currency. The currency of choice should be the Canadian dollar.”

Two months earlier, in March, a planned speech by Canada’s ambassador to Iceland, Alan Bones, had been abruptly cancelled by the Canadian government after the diplomat was interviewed by a Reykjavik radio station and signalled that Canada would be open to having Iceland adopt the Canadian dollar.

A spokesman for Foreign Affairs Minister John Baird said at the time that the ambassador’s speech was scuttled because the planned venue — a conference organized by an Icelandic opposition party — was “not an appropriate event for him to speak at.”

Óskarsson, who took up his post as Iceland’s top envoy to Canada in May, previously served as the country’s ambassador to Austria and Japan. While acknowledging the important cultural connections between Canada and Iceland — including the “common history” symbolized by Manitoba’s large Icelandic-Canadian community around the town of Gimli — Óskarsson said the required economic ties to support a common currency simply “don’t exist” between the two countries.

“I’m particularly referring to trade between the two countries,” said Óskarsson, who has made boosting Iceland’s exports to Canada a top priority during his ambassadorial term. “The economists (who authored the recent report) conclude that you need to have lots more trade in order to adopt the currency of another country.”

The economists’ report, issued on Sept. 7, concluded that, “the euro seems to be the most obvious option if Iceland chooses to adopt another currency or peg the króna to it.

The European economic zone “is by far Iceland’s largest trading partner,” the report added, highlighting the “network advantages” of sharing a currency with many other countries. “Furthermore, the euro weighs heaviest in Iceland’s external debt and, together with the U.S. dollar, is the most common currency for settling Iceland’s international trade.”

With regards to Canada, the report concluded that the Canadian dollar “appears in most respects to be a poor choice.” Canada is “a small currency area with non-existing network effects,” the report noted, “trade with Canada is very limited, and the two countries’ business cycles have little in common.”

The report acknowledged, however, that “monetary policy in Canada is sound.”

Óskarsson said speculation about Iceland embracing the loonie had “never been done under the leadership of the government. It has been more the opposition and interest groups in society that have been pushing for that debate.”

Yet even last week, Iceland’s honourary consul general in Canada, Jon Johnson, said in a televised interview that the proposed adoption of the Canadian dollar is “not a dumb idea.” He noted that the loonie is a “neutral currency, it’s a stable currency, and Canada has a very strong banking system.”

And Canadian Nordic Society president Lennard Sillanpää — whose organization encourages links between Canada and the Nordic nations of Iceland, Norway, Denmark, Sweden and Finland — told Postmedia News that adopting the loonie “may not be the preferred option” for solving Iceland’s currency woes, but “it has become a part of the debate in Iceland.”

Still, Óskarsson said, the idea of giving up the coins and banknotes that the country has used for generations — whether to adopt the euro or any other currency — would not be easy for the Icelandic people.

And the prospect of the Canadian dollar — a currency symbolized by a fish-eating bird — replacing the króna, the base denomination of which features an image of the cod fish, appears to have proven too much to swallow.